2008 Annual report - Sappi

sappi
The movement in net debt over the past three years is
explained below.
The average maturity of our debt is 5.7 years with the profile as
shown below.
US$ million 2008 2007 2006
Net debt at beginning
of period 2,257 2,113 2,008
Cash utilised/(generated)
during the period 139 (24) 127
Currency and fair
value impact 9 168 (22)
Net debt at end
of period 2,405 2,257 2,113
Since the beginning of fiscal 2006, net debt has increased by
US$397 million. US$155 million of this increase was due to the
impact of translating our European and South African debt into
the weakening US$ and other fair value adjustments. During
this period we utilised US$242 million of cash due mainly to
the expenditure over the past three years on the Saiccor Mill
expansion project (US$515 million) and the acquisition of Paper
Machine No 3 at Somerset Mill (US$75 million).
Debt profile
The make-up of net debt is set out in the table below:
US$ million 2008 2007 2006
Long-term debt 1,832 1,828 1,634
Short-term debt 821 771 694
Bank overdraft 26 22 9
Cash (274) (364) (224)
Net debt 2,405 2,257 2,113
We believe we follow a prudent approach with regard to liquidity
risk. As at September 2008 financial year-end, short-term debt
and overdraft funding was US$847 million, US$274 million of
which was covered by cash and near cash resources. Thus, the
true short-term liquidity exposure is more of the order of US$573
million. Of this, US$360 million (at the financial year-end) was in
the form of revolving securitised trade receivables funding which
in the normal course we expect to continue to be available. For
further information on group borrowing facilities secured by trade
receivables, refer to Note 20 of the Financial Statements.
The short-term debt of US$821 million in 2008 includes an
amount of US$360 million (2007: US$354 million) of securitised
receivables funding under various revolving securitisation
programmes.
// 2008 Annual report
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